Audit Office report highlights potential tax evasion in multi-million euro real estate deal

The Cyprus Audit Office has released a special report detailing significant irregularities in a 2015-2017 real estate transaction involving a prominent businessman. The investigation found that an original sale price of €19.35 million was reduced by 44% to €10.85 million within six months, converting a profit into a €7.7 million accounting loss. This loss was subsequently used to offset other taxable profits, resulting in a substantial loss of state revenue. Auditors also identified inflated construction costs, including the questionable capitalization of €7.9 million in interest during periods of suspended work. Despite multiple red flags and deviations from international accounting standards, the Tax Department reportedly failed to intervene or conduct an adequate investigation. The property eventually returned to the original owner’s family through complex corporate structures. Tax Commissioner Sotiris Markidis has confirmed that a review of the report's findings is currently underway.